An independent arbitrator has ruled that Internal Revenue Service officials acted improperly in unilaterally terminating certain provisions of the agency's contract with employees represented by the National Treasury Employees Union.

Managers' prerogative to assign and schedule work did not outweigh the IRS' obligation to bargain in good faith with NTEU, arbitrator Roger Abrams said in a Sept. 21 decision. He ordered the agency to give proper notice if it wishes to bargain over the measures.

"NTEU now has two highly respected and independent arbitrators ruling that the decisions management made in structuring its term bargaining strategy were illegal from beginning to end," NTEU President Colleen Kelley said in a statement.

Robert Marvin, an IRS spokesman, said the agency had no comment on either the decision or any possible follow-up actions.

In June 2006 when the contract expired, IRS officials announced the agency was withdrawing from three "permissive and unenforceable" provisions, even though the old contract remained in effect until new terms were reached. The provisions gave NTEU the right to review training materials and certain performance standards, assign members to work teams in accordance with IRS specifications, and hold 30-minute meetings without supervisors present after formal meetings convened by the IRS and related to conditions of employment.

The IRS argued that the provisions constituted an undue restriction on the rights of management to direct and schedule work assignments. That claim was at the core of Abrams' decision.

"A federal agency must bargain in good faith about terms and conditions of employment, so-called 'mandatory subjects of bargaining'," he wrote. "It is not required, however, to engage in substantive bargaining about decisions that fall within managerial control . . . . Management is permitted to bargain about these matters, but it is not required to do so by law."

Determining what falls under that managerial scope was difficult, Abrams said.

"When employees would benefit and the burden on management is minimal, the matter is negotiable," he stated.

Abrams concluded that in the case of the 30-minute meetings, "the union presented evidence . . . that these time-limited but timely meetings are more efficient than meeting with each employee separately. . . . Communicating with all of the employees in one place may, in fact, result in less disruption of management rights to assign work than the alternative."

Abrams also argued that because the IRS "determines the precise qualifications of the persons who would serve" on the working groups that could veto or approve training materials and performance measurements, "it is able to maintain its overall status and control."

But regardless of the substance of the individual provisions at issue, Abrams ruled that the IRS' actions damaged the relationship between the agency and the union.

"The union says the agency's actions on June 30, 2006, undermined its status as the exclusive bargaining representative, and that is true," Abrams wrote. "Even more importantly, it undermined the structure of the parties' relationship. As such, the unilateral abrogation of those provisions constituted an unfair labor practice and the failure to bargain about the impact and implementation of the decision violated the National Agreement."

This decision was the second issued by an arbitrator in response to the dispute between the IRS and NTEU. A July decision by David Vaughn said that the "totality of agency conduct [toward contract negotiations] establishes bad-faith bargaining." A decision on a third grievance is pending.

NTEU has asked the Federal Labor Relations Authority to prevent the Federal Service Impasses Panel from imposing bargaining rules on the union and the IRS, arguing that Vaughn's decision said that bad-faith bargaining meant the parties were not yet at impasse.

"The FSIP is composed entirely of individuals appointed by this president without Senate confirmation and who have shown consistently low regard for employee collective bargaining rights," Kelley said.

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